How much can the government tax carbon?



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    The government could theoretically impose any amount of tax that it wants on carbon. The trick is finding a balance that will allow most industries to continue operation without causing too much economic hardship. Thus, many politicians are advocating a cap-and-trade system instead. A Cap-and-trade system is essentially a carbon tax where the quantity of carbon produced is set, but the price of carbon is determined by the economy. Here is a link to a comparison of carbon tax vs. a cap-and-trade system.

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